Gildan Activewear Inc. is entertaining offers to buy the business after seeing interest from at least one potential buyer.
The Montreal-based clothing manufacturer said Tuesday that the company received a "non-binding expression of interest" from a potential purchaser that it did not name.
The company's board formed a special committee of independent directors to "consider the merits of the proposal and any alternative transaction, including maintaining the status quo and continuing to execute on Gildan’s existing business plan," spokesman Simon Beauchemin said in a Tuesday email.
The board eventually determined it was in Gildan's "best interests" to contact other potential bidders "with a view to maximizing the value of any potential transaction."
"Several of these counterparties expressed an interest in considering a potential friendly transaction with Gildan," Beauchemin said, cautioning that there is no guarantee any deal will materialize.
The development comes as Gildan has been embroiled in a fight over who should lead the firm since it announced late last year that co-founder and then-chief executive Glenn Chamandy would be replaced as CEO by Vince Tyra.
Tyra previously served as CEO of clothing company Alphabroder and was president of Fruit of the Loom before it was sold to Berkshire Hathaway.
Once Tyra was named as Chamandy's successor, a group of the company's shareholders including Browning West, Jarislowsky Fraser and Turtle Creek Asset Management Inc, began calling for the decision to be reversed.
They painted Chamandy as the superior leader, with Turtle Creek even calling his termination a "grievous error" that appeared to have been done in haste and without consideration of shareholders or the impact on the company.
Gildan's executives, however, claimed Chamandy had no credible long-term strategy and was focused on "high-risk and highly dilutive multi-billion-dollar acquisitions that would shift Gildan away from its core area of manufacturing experience."
The company said Chamandy had lost the board's trust and later accused him of having inappropriately close relationships with some shareholders pressing for his return.
Chamandy did not immediately respond to a request for comment Tuesday, but an automatic email reply directed media to his previous statements on Gildan.
In those statements, he defended his leadership and said the company's board had been making "false, defamatory and misleading" statements, making him "one of many victims of the board's rogue behaviour and value-destroying actions."
"Gildan's employees, customers and shareholders are now facing an uncertain future because of it," he said.
Gildan's history dates back to 1946, when Glenn Chamandy’s grandfather, Joseph Chamandy, started Harley Inc., a manufacturing company that produced activewear, children’s apparel and sleepwear.
Greg and Glenn Chamandy took over the business in 1982. Two years later, they expanded the company with the acquisition of knitting manufacturing business Gildan Textiles Inc.
This report by The Canadian Press was first published March 19, 2024.
Companies in this story: (TSX:GIL)
Tara Deschamps, The Canadian Press
